The present invention relates to a claim repricing system for processing insurance claims. In particular, the present invention relates to an automated system operative locally or remotely for repricing claims individually or in batch.
The insurance industry has long faced the challenges of quickly, accurately, and efficiently processing claims. The claims may arise from many sources, but often originate with health care service providers that, for example, supply hospital inpatient, hospital outpatient, and worker""s compensation medical services. In addition, the tremendous growth in recent years of health organizations, such as Preferred Provider Organizations (PPOs), has contributed significantly to the number and type of claims insurers must process.
In a PPO, for example, claims may arise from any member of any group of health care professionals or hospitals that have contracted with an employer or insurance company to provide medical care to a specified group of patients. The participating health care providers typically exchange discounted services for an increased volume of patients from the group. One advantage of PPOs is that they are often very large, thereby providing a wide choice of physicians, hospitals and other health care providers. In addition, PPO members usually do not need prior authorization to see a specialist, and have some level of coverage regardless of where they go for care.
Regardless of where and how insured patients incur medical expenses and submit claims, the fact remains that the claims must be processed before being paid. The processed claim gives rise to a xe2x80x9crepricedxe2x80x9d claim amount. The repriced claim amount is generally lower than the original claim amount, and represents the money to be paid to the provider for rendering the services. Inaccurate claim repricing has a significant detrimental impact on insurer profitability, not only as an immediate consequence of incorrect claim payment, but also due to the need to engage in ongoing repriced claim review (and re-repricing when mistakes are found).
In the past, however, repricing claims has been a difficult, error prone, and time consuming burden, in part due to the fantastically complicated set of rules underlying claim repricing. Even a skilled claim repricer may only be able to reprice 125 claims per week. Due to the time consuming repricing process and the frequent need to employ extra help, Third Party Administrators (TPAs) are often hired to reprice claims. However, TPAs are generally not well versed in the repricing process, and often reprice 40% or more of claims incorrectly. The expense of exchanging claims, fee schedule records, and provider records with the TPAs further detracts from any benefit the TPAs may provide.
Some of the difficulty surrounding repricing originates in the vast number of services that a provider may render, the specific handling and processing exceptions required for the services, and the variation in the forms used to submit claims. For example, PPO and EPO claims may be submitted on a Health Care Financing Administration (HCFA) 1500 form, while hospital inpatient and outpatient services may be submitted on a UB-92 form. Superbills, which conform to no standard specification, may also detail services to be repriced.
The initial repricing steps require the claims to be categorized correctly. Thus, after a new claim is received, opened, sorted, and stamped, a repricer determines, for example, whether the claim is a workers"" compensation claim, a hospital claim, or a physician claim. Hospital claims must be further categorized into inpatient or outpatient claims. Inpatient claims are further distinguished, among other things, based on whether a Diagnostic Related Group (DRG) code applies.
In repricing a physician claim on a HCFA 1500 form, the repricer must first identify the physician, typically according to tax id. Each physician may have multiple tax ids generally, but not necessarily, corresponding to differing practice locations for that physician. The repricer must then select the correct fee schedule or straight discount amount from among several choices. Once the correct fee schedule is found, each service on the HCFA 1500 form must be repriced.
Each service is classified according to a Current Procedural Terminology (CPT) code that identifies the medical service or procedure. The purpose of a CPT code is to provide a uniform language that accurately describes medical, surgical, and diagnostic services. There are, however, over 14,000 CPT codes that may need to be checked against the fee schedule for repricing. Furthermore, once the repricer determines the repriced amount from the fee schedule, the repricer must replace the initial amount with the repriced amount and repeat the process for every CPT code. After the repricer has processed each service, the repricer is also responsible for maintaining a record of the repriced claim and generating a repriced claim form for submission to an insurer for payment.
Further complicating the repricing process is the fact that special exceptions may apply. For example, anesthesia has its own special CPT codes, over 50 code modifiers, and 6 secondary modifiers. Anesthesia thus invokes a separate set of repricing formulae that increases the complexity of the already complicated repricing process.
In addition, of course, to repricing a physician claim on a HCFA 1500 form, the repricer must also be able to handle hospital claims on a UB-92 form. Repricing a hospital claim is as complicated, if not more complicated than repricing a physician claim. For example, and as noted above, hospital claims need to be classified as inpatient or outpatient claims, and scoured for any number of special codes and exceptions.
Inpatient claims must be further classified as DRG or non-DRG claims. Multiple DRGs typically exist, requiring the repricer to correctly choose the applicable DRG. Likewise, for claims that use straight percentage repricing, many different percentages are possible and require the repricer to intelligently select the correct percentage.
Outpatient claims are repriced line item by line item, while Inpatient claims are repriced by the total value of services. Outpatient claims are further subject to numerous repricing exceptions for specific services including, for example, transplants. Ambulatory Surgical Codes (ASCs) form another type of exception. The ASCs generally fall into at least eight groups each requiring a predetermined flat dollar repricing determination.
The complications noted above are only a few of the many issues that a repricer must address while working with a claim. In the past, the burden of claim repricing has meant that even an experienced repricer could only process 125 claims per week. Today, with hundreds of thousands of claims requiring processing annually, the repricing techniques of the past are no longer suitable.
A need has long existed in the industry for an improved method of repricing insurance claims.
It is an object of the present invention to provide a claim repricing system.
Another object of the present invention is to provide an automated, accurate, and rapidly operating claim repricing system.
Yet another object of the present invention is to compile a database of repriced claims for future analysis and processing.
It is another object of the present invention to provide a claim repricing system that allows local and remote repricing of claims.
Still another object of the present invention is to reprice claims quickly and efficiently in batch.
A further object of the present invention is to provide a claim repricing system that is able to reprice a wide variety of claims, including physician, hospital inpatient, hospital outpatient, and other types of claims.
The present claim processing system may be implemented on a general purpose computer. The claim repricing system generally includes a processor and a program and data memory coupled to the processor. The memory stores the requisite database tables, as well as program instructions for repricing several different types of claims, including physician, inpatient, and outpatient claims.
For example, for physician claims, the instructions may store service charges identified by CPT codes, identify a physician from a database of physicians according to a physician ID, and identify a patient from a database of patients. The instructions may then determine an employer insurance plan providing coverage for the patient based on an insured-by ID associated with the patient and a repricing indicator based on an affiliation of the physician as well as the employer insurance plan. Additional instructions then reprice the service charges according to the repricing indicator to generate repriced service charges.
As an example, the repricing indicator may be a fee schedule setting forth individual repricing dollar amounts associated with CPT codes. Alternatively, the repricing indicator may be a straight percentage discount. The claim repricing system further includes instructions for determining availability of insurance plan coverage to the patient based on an effective date of the employer insurance plan, as well as determining the availability of the physician or provider based on an effective provider date.
The claim repricing system handles specialty codes and exceptions. Thus, for example, the claim repricing system includes instructions for determining the presence of an anesthesia specialty code, and for determining the correct number of anesthesia units and an anesthesia repricing indicator. The anesthesia repricing indicator may be a percentage discount, for example, or a rate.
As noted above, the present claim repricing system is not limited to repricing physician claims. Rather, as explained in more detail below, the claim repricing system may also repricing inpatient and outpatient claims. Furthermore, the claim repricing system may operate in a batch processing mode to quickly, accurately, and reliable reprice large amounts of claims.